News Headline Summary

ASIA-PACIFIC MID-SESSION UPDATE - 04/01/13

As Asian equity markets head through the mid-point of the trading day, the ASX 200 trades firmly in negative territory as technology leads the way down, with lower commodity prices continuing to weigh on resources stocks, as risk-off sentiment has rolled over from the US session following the less dovish than expected minutes from the FOMC. Several FOMC members favoured ending quantitative easing before the end of 2013. Gold miners are the biggest underperformers today with the spot gold price dropping below the 200 DMA level at USD 1661.

Japanese and mainland China markets have resumed trading today after their new-year holidays. The Nikkei 225 started off with substantial gains and thereafter trended sideways in its first trading day of 2013 in reaction to macro developments regarding the US fiscal situation over the new year. Weakening JPY has also contributed to the strength of the local market. Automakers in Japan have largely benefited by their strong December US sales numbers; Honda (+4.13%), Toyota (+4.74%), Nissan (+4.44%).

In terms of macro-economic data, today’s highlighted HSBC Chinese non-manufacturing PMI data missed previous at 51.7 vs. 52.1, hitting its lowest levels since August 2011. Following this release, we heard some interesting comments from HSBC’s chief economist for China, who said that despite the moderation of the headline services PMI, the underlying strength of services sectors improved in terms of stronger business flows and employment growth.

The calendar for the rest of the day remains on the light-side with the Indian PMI scheduled to be released at 0500GMT/2300CST, although focus will be on the tomorrow’s US nonfarm payroll data.